Why Google Analytics and Google Adwords have different conversion rates

So here I am in the midst of a new job learning a new industry with all of its jargon and definitions. Amongst the very important things I have been learning about are goals and conversions. A goal is something you want a visitor to your site to do, be it fill in a form, or make a purchase. A conversion occurs when the visitor completes that goal. Simple, right?

So how come both Google Analytics, which monitors traffic flow to and through your site, and Google Adwords, which directs traffic into your site, both have the concept of conversions and how do they relate to one another? More importantly, how come they're sometimes different?

Well, as the Javascript for Google Analytics is on every page of your website it knows exactly where a visitor is and has been. That much makes sense. How does Adwords know? You help it by setting up conversion tracking. This places a cookie on the user's machine when they click on an Adword. When they finally get to a conversion page the cookie is picked up and Adwords registers the conversion as attributable to the source ad. What Adwords doesn't know, however, is which goal has been converted; that information comes from Analytics. Meanwhile, Google Analytics, also registers that the conversion has been made by virtue of the fact that traffic from a particular source has reached a conversion page.

So, you'd think that the conversion rates would be the same, wouldn't you? Well, more than likely, they aren't. Once you've clicked on an Adword and obtained the cookie, it sits on your machine for 30 days. This allows you to go away and think about whether you really want to make the purchase. In an Adwords report, your click has been registered but it hasn't led to a conversion. A few days later you return to complete the transaction and a conversion is registered, with the start date of the cookie as the date of the conversion. Viewing an Adwords report for the same time period will now show a different conversion rate. However, Analytics will always give you the same information for a given time period and won't count a conversion until it is completed.

For example, if I click on an Adword in August, but fail to complete the transaction until September, an Adwords report for August will count the conversion but an Analytics report won't. But the figures should ultimately end up the same right? Well, no, because come September my Analytics report has counted the conversion started in August, but Adwords won't count it for that time period because it already counted it in August.

Basically there is constant flux between these two figures and they are very rarely exactly the same.